• A first-time homebuyer tax credit to assist in making a down payment on a home. This would provide individuals and families with a refundable credit (equivalent to an interest-free loan) of ten percent of the purchase price of their home (up to $7,500). Taxpayers would be required to repay any amount received under this provision to the government over 15 years in equal installments. The credit will be phased out for taxpayers with adjusted gross income in excess of $70,000 ($110,000 in the case of a joint return).
  
  
• An additional standard deduction for real property taxes to help homeowners who claim the standard deduction by allowing them to claim an additional standard deduction of up to $350 ($700 for joint filers) for State and local real property taxes. This provision applies for 2008.
  
  
• A temporary increase in low-income housing tax credit and simplification of the credit. The bill would increase the current limit of the credit from $2.00 for each person residing in a state by an additional 20 cents per resident. This will help put builders to work to create new options for families seeking affordable housing alternatives. The credit will also be simplified to improve its effectiveness.
  
  
• A temporary increase in mortgage revenue bonds to allow for the issuance of an additional $10 billion of tax-exempt bonds to refinance subprime loans, provide loans to first-time homebuyers and to finance the construction of low-income rental housing.
  

The bill will be considered by the Ways and Means Committee tomorrow. NAHMA will be sure to keep members informed as the bill advances through the House of Representatives. In the meantime, please click here for more detailed information about the Housing Assistance Tax Act.


Section 8 Voucher Reform Act of 2008 (SEVRA)
Connecticut Senator Chris Dodd introduced this bill in March and it has been passed by the House, it’s being considered by the Senate. The Section 8 Voucher Reform Act (SEVRA), will improve the Section 8 voucher program, which now serves almost 2 million low-income families all across the nation. The Section 8 program is a successful public-private partnership, where local agencies assist families in renting private market housing.  The success of the voucher program depends on consistent and sensible HUD regulation, effective local administration, and the willingness of landlords to participate.  The Section 8 voucher bill ensures more effective and efficient administration of the program, helping to attract landlords to the program in the following ways:

• Stabilizes Funding for the Voucher Program.  This bill provides a stable formula for allocating voucher funds to provide predictable funding for public housing agencies (PHAs).  PHAs will receive funding to cover their vouchers in use, and the bill ensures that funds are distributed to agencies that can use the funds to help people in need.  Agencies are encouraged to lower the cost per voucher in the new funding formula, helping to create efficiencies in the program.
  
  
• Encourages Employment.  The bill provides a standardized “earnings disregard” each year, and provides for funding Family Self Sufficiency coordinators in a more systematic way so that more families can access this successful program aimed at increasing earnings and saving for homeownership.
  
  
• Ensures Housing is Safe, Decent and Adequate.  Where life-threatening conditions exist, the bill allows PHAs to contract for needed repairs, and requires abatement of assistance to landlords where units are not safe and decent.  The bill ensures that tenants are given adequate time to move when their current unit is not in compliance with HUD physical standards.
  
  
• Requires Effective Voucher Administration.  Requires biannual assessments of local voucher programs, including physical condition of units, accuracy of rental and utility payments, utilization of vouchers, and timeliness of payments to landlords.  The bill also requires FMRs to be set based on smaller geographic areas to ensure accuracy of rent levels.
  
  
• Encourages Housing Development and Preserves affordable housing.  Increases the percentage of vouchers that may be project-based so that low-income families have additional affordable housing opportunities.  Also allows project-based vouchers to be used for preservation of affordable housing.  The bill also authorizes 20,000 additional incremental housing vouchers.
  
  
• Streamlines Requirements.  To more effectively use program resources, the bill requires unit inspections every 2 years instead of annually.  To assist in attracting landlords to the program, the bill allows landlords to be paid prior to an initial inspection subject to a successful inspection within 30 days, and also allows reliance on inspections conducted pursuant to other federal programs.  While the bill retains the requirement that tenants pay 30% of their income towards rent, it streamlines and standardizes the calculation of income.  Allows housing agencies to rely on standard, as opposed to individualized, income deductions; allows agencies to recertify income of fixed-income residents every three years; requires interim certifications less frequently; and allows prior year income to be used.
  

ARIZONA

Arizona Continues To Wrestle With Immigration 
Arizona HB 2625, sponsored by Rep. Russell Pearce (R-18), recently received its first hearing in the House Appropriations Committee, chaired by Pearce. The bill was amended to address some of the apartment industry's preliminary concerns; however, while the Arizona Multihousing Association (AMA) is involved with improving the language of this bill, the sponsor and the Appropriations Committee members know that even with amendments AMA is opposed to this type of law. The newly amended bill, nonetheless, continues to penalize property owners $250 a day in fines for each violation.The apartment industry's concerns with this legislation include:

• The bill does not offer protection from Federal Fair Housing complaints so it is possible that the number of complaints will increase.
• The bill does not address mobile home rentals or extended-stay hotel rentals.
• There is no source for property owners to verify legal status.
• There is no plan to educate apartment owners and managers on these changes.
• Some rental agreements are not written and are day to day or week to week.
• Some rental agreements are automatically renewed and do not result in a new agreement.
• Does the leasing agent need to ask for legal status documentation for renewals even if the resident has been living on the property for several years? If found to be illegal will the property owner be charged $250 per day for the period the resident lived on the property?

(Arizona Multihousing Assn. – Patrick M. Horn)


CALIFORNIA

CAA Opposes Attempts to Tighten Rent Control Laws
The California Legislature will vote on legislation this year that prohibits rental property owners from removing old rent-controlled property from the market unless the same number of units are rebuilt and offered at the rent-controlled price. The purpose of the legislation, SB 1299 by San Francisco Sen. Carol Migden (D), is to ensure that the number of rent controlled units in a local community does not decrease. In doing so, the bill guts the protections found in existing California law – known as the Ellis Act – that protects owners in rent control communities who may find that running their buildings no longer makes economic sense.

SB 1299 states that if a property owner in a jurisdiction with rent control demolishes or replaces residential units on the same property, the owner must either include the same number of demolished rent-controlled residential rental units on the property or provide those units at another mutually agreeable location. Those replacement units may be required to have the same price control or system of price control that applied to the demolished units.

SB 1299 would make it extremely difficult, if not impossible, for property owners to leave the business. Property owners in California must be given equitable opportunities and solutions to exit the rental market, particularly in jurisdictions where local laws have become overly burdensome to the point that they make it difficult for the property owner to effectively operate.

CAA will strongly oppose this legislation and has placed it at the top of its priority list.

(California Apt. Assn. – Rachel Arnold)


CAA Targets Eviction Delay Tactics
In California eviction cases, one of the most common delay tactics is to request a jury trial at the last possible minute. Jury trials are expensive and time consuming. While property owners generally prevail in these situations (the same outcome obtained without a jury), the resident gains additional time in the unit and is usually represented free of charge by an organization or attorney who uses the jury trial delay tactic.

While CAA is targeting these attorneys and organizations on a number of fronts, CAA recently submitted comments to the state courts and chief justice outlining the problem with existing and proposed jury instructions, which have, in part, lead to these negative practices.

CAA pointed out to the courts that the jury instructions are inconsistent with current laws. For example, the instructions allow a jury to award a resident damages when minor aesthetically unsatisfying conditions exist at the property, such as defective Venetian blinds. CAA pointed out that the California Supreme Court previously ruled on this subject when it provided that the malfunction of Venetian blinds and wall cracks go to what may be called "amenities." Living with defective Venetian blinds may be unpleasant, aesthetically unsatisfying, but does not come within the category of uninhabitability.

(California Apt. Assn. – Rachel Arnold)


San Diego Approves Lead Hazard Ordinance
On March 11, the San Diego City Council voted to pass the Lead Hazard Prevention and Control Ordinance. The ordinance had been debated at the city level for more than five years, and the San Diego County Apartment Association (SDCAA) was a key stakeholder during that development process. The ordinance affects all commercial and residential properties (including rental) in the City of San Diego built prior to 1979.

Initially, it was recommended that rental properties be subjected to certified lead inspections anytime there is a turnover of residency and that every residential property obtain a full certified lead inspection by 2011. SDCAA successfully lobbied to eliminate both of these requirements as it was estimated that they would cost the apartment industry more than $100 million in the first three years of operation alone, and would not have significantly augmented the already standard practice of repainting units when residents move.

As it applies to the daily operation of rental properties, the approved ordinance requires the following:

• Visual inspections of units by a responsible person (defined as the property owner or his or her designee) prior to re-occupancy.
• The correction of any identified lead hazards using Lead Safe Work Practices (LSWP) OR documentation from a state-certified lead inspector showing that the property or painted area being disturbed does not contain lead above the listed thresholds.
• Property owners must maintain inspection, testing and correction documents for a period of three years to be made available to the city upon request.

Any work performed on pre-1979 structures that disturbs paint must be done in accordance with the ordinance's standards for Lead Safe Work Practices (LSWP) unless a certified lead inspector determines that all paint contains lead less then regulatory thresholds. These specific LSWP standards vary according to the amount of lead in the paint and by the quantity of paint being disturbed. There also are occupant notification and relocation standards that may apply in these situations.

A cost-recovery fee in the amount of $31 will be applied to certain permit categories for work that disturbs painted surfaces on structures built before 1979. 

(San Diego County Apt. Assn. – Rachel Arnold)


Eliminate Smoking in Multi Family Housing? Ever since secondhand smoke was declared a human carcinogen a decade ago, the anti-smoking movement has been gaining steam both in California and across the country. During this time, anti-smoking groups have successfully passed state and local laws that restrict smoking in the workplace and many other indoor and outdoor public areas. One of the current trends is to eliminate smoking in multi-family housing. Efforts that began with abolishing smoking in common areas accessible to all residents and employees are evolving into efforts to restrict smoking in individual rental units. The challenges occur in the enforcement of the local laws – rental property owners held liable for enforcement of no-smoking laws at their properties. In some communications the penalties are quite severe against a property owner if the owner fails to stop a tenant from smoking at the property. CAA staff has been directed to consider legislative opportunities to bring some clarity and consistency to laws relating to smoking in rental units.

(Source California Apartment Association – California Apartment Associations Sets Legislative Priorities for 2008 – by Debra Carlton, Senior Vice President of Public Affairs)


IRS announces rebate release schedule
The IRS has released its schedule for issuance of rebate checks in response to the Economic Stimulus Act of 2008 (P.L. 110-185). The payment dates range from May 2 to July 11, 2008, and are based on:

• Whether the taxpayer uses direct deposit or paper check; and
  
  
• The last two digits of the taxpayer's social security number.
  

People who file a return after April 15 will receive their economic stimulus payment, but probably about two weeks later than the schedule shows. A return must be filed by October 15 in order to receive a stimulus payment in 2008.


City of San Diego’s Recycling Ordinance – Effective January 1, 2008
The City of San Diego's Recycling Ordinance was unanimously approved by the City Council on November 13, 2007. The new ordinance requires recycling of plastic and glass bottles and jars, paper, newspaper, metal containers and cardboard at private residences, commercial buildings, and at special events requiring a City permit.

The ordinance is effective on January 1, 2008 for City-serviced customers who already have blue recycling carts. For privately serviced apartment and condominium complexes, businesses and special events, the ordinance will be phased in over the next two years depending on the size of the facility as follows:

Effective February 18, 2008:

Residential buildings served by private waste haulers:

     Single family

     Apartments and condominiums - 100 units or more

Commercial - 20,000 square feet or more

Special events

Effective January 1, 2009:

Apartments and condominiums - 50 units or more

Commercial - 10,000 square feet or more

Effective January 1, 2010:

All Apartments and condominiums

All Commercial facilities

HUD NEWS

John L. Garvin, Deputy Assistant Secretary for Multifamily Housing Programs and Senior Advisor to Federal Housing Commissioner, acknowledges that the section 8 funding for fiscal year 2008 is deficient by approximately two billion dollars. The industry believes the figure to be closer to $2.8 billion.  Mr. Garvin says that there should be no problem funding contracts, as they will be renewed with partial year funding with the balance hopefully being addressed in two or more subsequent funding.  Possible solutions were to borrow from fiscal year 2009 and 2010 allocations and also to request Emergency Supplemental Funding for the current year. To the extent that money is borrowed from future year allocations, it only postpones the problem to be addressed by the next administration.


Projects submitting RCS (Rent Comparability Studies) 120 days or more prior to the contract expiration date are seeing contracts renewed for six months at the existing rents. The explanation is that HUD needs time to verify the validity of the RCS prior to approving the OCAF (Operating Cost Adjustment Factor) rent increases. In past years HUD's in-house appraisers would review the RCS and approve them unless there were substantial errors or omissions. We are now being told that the appraisers are going to the subject buildings to verify the information on the RCS. We question why more than 120 days would be required for this validation process for the RCS and subsequent OCAF rent increases.


RHIIP Listserv Posting #95
Important Enterprise Income Verification (EIV) System Related Information

SHARING OF EIV DATA WITH OTHER AGENCIES PROHIBITED

The EIV Social Security (SS), Supplemental Security Income (SSI), new hires (W-4), wage and unemployment compensation information contained in the EIV system may only be used for limited official purposes – by owners/agents (O/As) for verifying the employment and income at the time of recertification for tenants participating in one of HUD’s rental assistance programs listed below, by Contract Administrators (CAs) for monitoring and oversight of the tenant recertification process and by the Office of the Inspector General (OIG) for investigative purposes. These programs include:

• Project-based Section 8
  

New Construction

State Agency Financed

Substantial Rehabilitation

Section 202/8

Rural Housing Services Section 515/8

Loan Management Set-Aside (LMSA)

Property Disposition Set-Aside (PDSA)

• Rent Supplement
  
• Rental Assistance Payment (RAP)
  
• Section 202/162 Project Assistance Contract (PAC)
  
• Section 202 Project Rental Assistance Contract (PRAC)
  
• Section 811 PRAC
  
• Section 236
  
• Section 221(d)(3) Below Market Interest Rate (BMIR)
  

Official use does not include O/As using the EIV data for certifying tenants under the Low Income Housing Tax Credit (LIHTC) or Rural Housing Services (RHS) Section 515 programs since neither the Internal Revenue Service (IRS) nor RHS are a party to the computer matching agreements the Department has with the Department of Health and Human Services (HHS) and with the Social Security Administration (SSA). The fact that there is financing through other federal agencies involved in a particular property under one of the authorized HUD programs does not permit that federal agency to use or view information from the EIV system for certifying tenants for their programs or for monitoring purposes.

TENANT CONSENT FORM HUD-9887 NECESSARY BEFORE EIV DATA MAY BE ACCESSED

Before accessing the employment or income data contained in the EIV system for a tenant, the O/A must make sure there is a current form HUD-9887, Notice and Consent for the Release of Information, signed and dated by the tenant(s), on file. This form must be signed and dated by the head of household, spouse, co-head, regardless of age, and by each family member who is at least 18 years of age, at the time of move-in and at each annual recertification.

Paragraph 7-10 of Handbook 4350.3 REV-1, Occupancy Requirements of Subsidized Multifamily Housing Programs, states that tenants are not required to report when a family member turns 18 years of age between annual recertifications. However, before accessing any employment or income information on an individual who turns 18 between annual recertifications, the O/As must make sure they have the 18 year old sign and date the HUD-9887 consent form as soon as possible after the person turns 18 if employment or income data contained in the EIV system will be accessed for this person.

TREATMENT OF MEDICARE PREMIUMS IN ANNUAL INCOME

When the Medicare premium is paid by the tenant, the gross amount of social security that includes the Medicare premium amount is included in annual income. This will be reflected in EIV when the net benefit amount being paid to the tenant is less than the gross benefit amount and the Medicare premium amount is listed under the Supplemental Medical Insurance. The amount of the Medicare premium is included as a medical expense when calculating the medical expense deduction. NOTE: The O/A must make sure that the Medicare premium amount is listed under the Supplemental Medical Insurance since the difference between the gross and net benefit may include the Medicare premium and/or additional deductions, such as garnishments, Medicare Part D prescription drug plan premiums, which are not listed on the benefit report.

When the Medicare premium is paid by the state or another entity, the gross amount of social security that does not include the Medicare premium amount is included in annual income. In this instance, this will be reflected in EIV when the gross benefit and the net benefit for the tenant are the same. The benefit statement will include the Medicare premium amount, a “Y” in the Buy-In column and a date in the Buy-In Start columns under the Supplemental Medical Insurance. The amount of the Medicare premium is not included in annual income or as a medical expense.

USING EIV DATA CONFERENCE CALL POWERPOINT PRESENTATION POSTED

On March 20, 2008, Headquarters staff held a conference call with the HUD Rental Housing Integrity Improvement Project (RHIIP) Help Desk Representatives, Traditional Contract Administrators (TCAs) and the Performance Based Contract Administrators (PBCAs) on using the data and reports contained in the EIV system. The power point slides used in this presentation are posted as a PDF file on the RHIIP Web site at:
http://www.hud.gov/offices/hsg/mfh//rhiip/mfhrhiip.cfm. O/As are encouraged to download and view this information as it will answer many questions regarding EIV data updates and using, safeguarding and retaining the employment and income information and reports contained in the EIV system.

SIGN-UP FOR ACCESS TO THE EIV SYSTEM

Owners/management agents who have not signed up for access to the EIV system are encouraged to do so. Instructions for getting access to the system are posted on the Multifamily EIV website located at:
http://www.hud.gov/offices/hsg/mfh//rhiip/eiv/eivhome.cfm


RHIIP Listserv Posting #96 -
ECONOMIC STIMULUS PAYMENTS (TAX REBATES) EXCLUDED FROM INCOME
The Economic Stimulus payments (tax rebates) received by applicants applying for assisted housing and by tenants participating in HUD’s rental assistance programs are excluded from income for the purposes of determining eligibility and rent.  The Economic Stimulus Act of 2008 requires this exclusion and the payments are an income exclusion under 24 CFR 5.609(c)(17) of HUD’s regulations.

TREATMENT OF MEDICARE PREMIUM When an applicant’s/tenant’s Medicare premium is paid by the State or some other entity, the Medicare premium is not included in annual income nor is it included as a medical expense.  The Medicare premium is excluded income under 24 CFR 5.609(c)(4) of HUD’s regulations.  This is a change to guidance issued during the EIV training session in June 2007. Owners/agents who have processed certifications/re-certifications for elderly or disabled tenants that include the Medicare premium as income should process corrections to the certifications/re-certifications.